AutoCoded Document




Exhibit 10.25

[EXECUTION COPY]





CONFIDENTIAL
SETTLEMENT AGREEMENT AND GENERAL RELEASE



     THIS
CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE (the
“Agreement”) is entered into as of August 15, 2004 (the
“Effective Date”), by and between Agere Systems Inc., a Delaware
corporation (together with its predecessors and its successors and assigns, the
“Company”), and Ronald D. Black  (the “Employee”).



W I T N E S S E T H:



     WHEREAS,
the Employee is currently employed by the Company;



     WHEREAS,
the Employee and the Company (the “Parties”) have decided to terminate
their employment relationship effective as of the date hereof; and



     WHEREAS,
the Parties have negotiated and agreed to a final confidential settlement of
their respective rights, obligations and liabilities;



     NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as follows:



     1.     
Payment. Subject to the terms and conditions of this Agreement, the
Company shall pay the Employee a severance payment equal to $1,540,000 (the
“Payment”). The Payment together with the Employee’s accrued
vacation shall be paid within 30 business days of the Expiration Date (as
defined in paragraph 8 of this Agreement) but in any event not earlier than the
Effective Date. The Employee acknowledges and agrees that the Payment (i)
represent the gross amount before all applicable federal, state and local
withholding taxes that are required to, and will, be deducted by the Company,
and (ii) except as set forth in Paragraphs 2, 3 and 4 below, is in consideration
of all amounts owed by the Company to the Employee, including without limitation
any amounts that may be due to the Employee under any Company benefit or welfare
plan or policy.



     2.     
Equity. All of the Employees vested and unvested stock options will be
treated in accordance with the Company’s existing 2001 Long Term Incentive
Plan and the Employee’s individual nonstatutory stock option agreements.



     3.     
Health and Welfare Benefits. The Employee’s health and welfare
benefits will be treated in accordance with the Company’s existing health
and welfare plans and policies applicable to the Employee, including, without
limitation, eligibility for COBRA benefits.



     4.     
Pension Plan. The Employee’s pension benefits, if any, will be
treated in accordance with the Company’s existing pension plan applicable
to the Employee.




1



Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions









             5.     Non-Solicitation; Non-Compete and Cooperation.



                   (a)     
Until August 14, 2006, the Employee shall not, without the prior written consent
of the Company’s Chief Executive Officer, (i) directly or indirectly
solicit or employ (or encourage any company or business organization in which he
is an officer, employee, partner, director, consultant or member of a technical
advisory board to solicit or employ) or (ii) refer to any employee search firms,
any person who was employed by the Company on the Effective Date.



                   (b)     
Until August 14, 2006, the Employee shall not, without the prior written consent
of the Company’s Chief Executive Officer, at any time or for any reason,
anywhere in the world, directly or indirectly (i) engage in any business or
activity, whether as an employee, consultant, partner, principal, agent,
representative, stockholder (except as a holder of less than 5% of the combined
voting power of the outstanding stock of a publicly held company) or in any
other individual, corporate or representative capacity, or render any services
or provide any advice to any entity that is a competitor of the Company (as
listed from time to time on the Company’s Annual Report on Form 10-K) or
their affiliates, or (ii) meaningfully assist, help or otherwise support any
person, business, corporation, partnership or other entity or activity, whether
as an employee, consultant, partner, principal, agent, representative,
stockholder (other than in the capacity as a stockholder of less than 5% of the
combined voting power of the outstanding shares of stock of a publicly held
company) or in any other individual, corporate or representative capacity, to
create, commence or otherwise initiate, or to develop, enhance or otherwise
further, any business or activity of any entity that is a competitor of the
Company (as listed from time to time on the Company’s Annual Report on Form
10-K) or their affiliates.



                   (c)     
If at any time the Employee violates the provisions of Paragraphs 5(a) or 5(b)
above, any amounts remaining unpaid under the terms of this Agreement shall
immediately be forfeited and terminated, and any amounts already paid (but not
including any federal, state, and local taxes that were withheld at payment) by
the Company to the Employee in accordance herewith, except for the sum of One
Thousand Dollars ($1,000) shall, at the sole discretion of the Company, be
required to be repaid by the Employee to the Company within ten business days of
the Company’s request in writing therefore. This provision shall not affect
the Company’s right to otherwise specifically enforce any provision
relating to non-solicitation or non-competition that is in this Agreement or in
any other agreement, document or plan applicable to the Employee.



                   (d)     
The Employee hereby agrees that, from time to time upon the reasonable request
of the Company, the Employee shall assist the Company in connection with any
pending or future dispute, litigation, arbitration or similar proceeding or
investigation or any regulatory requests or filings involving the Company, any
of its employees or directors or the employees and directors of any subsidiary.




2



Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions









             6.     
Confidential Nature of Agreement; Publicity and Non-Disparagement.




                   (a)     
Except to the extent required to effectuate the restrictions contained in
Paragraph 5(a) of this Agreement, the Employee agrees that this Agreement and
its terms are confidential, and he shall neither discuss the terms of this
Agreement with, nor disclose this Agreement to, any person or organization,
except as required by law or lawful court order. Notwithstanding the foregoing,
the Employee may in any event discuss this Agreement with, and disclose all or
any portion of this Agreement to, his spouse, and his legal and financial
advisors. The Employee agrees to advise these individuals of the confidential
nature of this Agreement and the facts giving rise to it as well as their
obligation to maintain the confidentiality of this Agreement or the facts giving
rise to it. If disclosure of this Agreement is requested or required (by oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or similar process), the Employee will promptly notify the
Company of such request or requirement and will cooperate with the Company such
that the Company may seek an appropriate protective order or other appropriate
remedy. Employee affirms that as of the Effective Date, he has not disclosed the
nature or terms of this Agreement except as otherwise permitted hereby.



                    (b)     
The Employee agrees that he shall not (i) testify or otherwise provide testimony
in any form at or for any legal or administrative proceeding, including
testimony related to any matter involving the Company, unless legally compelled
to do so or (ii) make statements to third parties, the public, the press or the
media or any administrative agency, in either case that would portray the
Company in an adverse light or disparage the Company, or cause injury to the
Company with respect to events occurring prior to or after the Effective Date.



             7.     Confidentiality.
The Employee hereby agrees and covenants, that:



                   (a)     
he shall not divulge to any person or entity other than the Company, without
express written authorization of the Company’s Chief Executive Officer, any
proprietary or confidential information, whether written or oral, received or
gained by him in the course of his employment by the Company or of his duties
with the Company (“Confidential Information”), nor shall he make use
of any such Confidential Information on his own behalf or on behalf of any other
person or entity, for so long as such Confidential Information is not known to
the general public; and



                   (b)     
he shall return or cause to be returned to the Company’s Chief Executive
Officer any and all property of the Company of any kind or description
whatsoever, including, but not limited to, any Confidential Information, which
has been furnished to him or is held by him, at his residence or elsewhere, and
shall not retain any copies, duplicates, reproductions or excerpts thereof.



            8     
Release. In consideration of the Company’s entering into this
Agreement and the payments and benefits set forth herein, the Employee, on
behalf of himself and his heirs, executors, administrators, successors and
assigns, knowingly and voluntarily waives, releases and forever discharges the
Company, each of its subsidiaries or affiliated companies, their respective
current and former officers, employees, agents and directors, and any successor
or assign of any of the foregoing, from any claim, charge, action or cause of
action any of them may have against any such released person, whether known or



3



Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions









unknown, from
the beginning of time through the date of this Agreement based  upon any matter, cause or
thing whatsoever related to or arising out of his  employment by the Company or his
termination other than claims arising out of a  breach of this Agreement or any claim
that cannot be waived by law. All such  claims are forever barred by this Agreement.



                   This
release and waiver includes, but is not limited to, any rights or claims under
United States federal, state or local law, for wrongful or abusive discharge,
for breach of any contract, or for discrimination based upon race, color,
ethnicity, sex, age, national origin, religion, disability, sexual orientation,
or any unlawful criterion or circumstance, including, but not limited to, rights
or claims under the Family and Medical Leave Act, claims of discrimination under
the Employee Retirement Income Security Act, the Equal Pay Act, the Occupational
Safety and Health Act, the Workforce Adjustment Retraining Notification Act,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
Section 1981 through 1988 of the Civil Rights Act of 1866, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Rehabilitation Act of 1973, Executive Order 11246
and any other executive order, the Fair Labor Standards Act and its state and
local counterparts, the Uniform Services Employment and Reemployment Rights Act,
and the Immigration Reform Control Act, all as amended. The Employee confirms
that he has no claim or basis for a claim whatsoever against the Company with
respect to any such matters related to or arising out of his employment by the
Company or his termination.



                   The
Employee affirms that he has been given at least 21 days within which to
consider this release and its consequences, that he has seven days following his
signing of this Agreement (the seventh day being the “Expiration
Date”) to revoke and cancel the terms and conditions contained herein and
the terms and conditions of this Agreement shall not become effective or
enforceable until the seven-day revocation and cancellation period has expired,
and that, prior to the execution of this Agreement, he has been advised by the
Company to consult with an attorney of his choice concerning the terms and
conditions set forth herein. Any revocation or cancellation of this Agreement by
the Employee pursuant to this paragraph shall be in writing delivered to the
Company.



          9.     
Entire Agreement. This Agreement contains the entire agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations, and undertakings, whether
written or oral, between the Parties with respect thereto. This Agreement may
not be modified or amended except by a writing signed by both Parties.



          10.   
No Admission. This Agreement is entered into in compromise of disputed
claims. The parties acknowledge and agree that this Agreement does not
constitute and should not be construed in any way as an admission by any other
party of (a) any wrongdoing or liability whatsoever, (b) any violation of the
Employee’s rights or those of any other person, or (c) any violation of any
order, law, statute, duty or contract. The Company specifically disclaims any
liability for any alleged wrongdoing or liability, for any alleged violation of
my rights or those of any other person, or for any alleged violation of any
order, law, statute, duty or contract.




4



Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions








          11.     
Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.



          12.     
Survival; Termination. The respective rights and obligations of the
Parties hereunder shall survive any termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations. This
Agreement may be terminated by the Company if the Employee breaches any
provision hereof.



          13.     
Interpretation; Governing Law. This Agreement shall be interpreted in
accordance with the plain meaning of its terms and not strictly for or against
any person or entity. To the extent that federal law controls the interpretation
or enforceability of any provision of this Agreement, this Agreement shall be
construed and enforced in accordance with federal law. Otherwise, this Agreement
shall be governed by and construed and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania without reference to the principles of
conflicts of law.



          14.     
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. Signatures delivered by facsimile shall
be effective for all purposes.




5



Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions










BY SIGNING AND DELIVERING THIS AGREEMENT, THE EMPLOYEE STATES:



     (A)     
HE HAS READ IT AND UNDERSTANDS IT AND HAS AT LEAST 21 DAYS TO CONSIDER IT AND A PERIOD OF
SEVEN DAYS AFTER  EXECUTING IT TO REVOKE IT;



     (B)     
HE  AGREES WITH IT AND IS AWARE THAT HE IS GIVING UP IMPORTANT RIGHTS, INCLUDING  RIGHTS
PROVIDED BY THE OLDER WORKERS BENEFIT PROTECTION ACT, FOR CONSIDERATION  TO WHICH HE WAS
NOT ALREADY OTHERWISE ENTITLED;



     (C)     
HE WAS ADVISED TO, AND IS AWARE OF HIS RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING
IT; AND



     (D)     
HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.



     IN
WITNESS WHEREOF, the Parties have executed this Agreement on the date first
written above.



             
                          
              AGERE SYSTEMS INC.





	 	     By: /s/ John T. Dickson

       Name:  John T. Dickson
     
 Title: President and Chief Executive
                 Officer









	 	     /s/
        Ronald D. Black

               Name: Ronald D. Black 

               Address:   1515
        Bette Lane                       







	 	                  
             Hellertown, PA 18055              







	 	             
                  _________________________








6




Agere
Systems-Proprietary (Restricted)
Solely for Authorized Persons Having a Need to Know Pursuant to Company Instructions